Why Michael Dell cared about customers who were heading to Compaq
A million years ago–well maybe 25–I called up Michael Dell and said “I have been tracking corporate PC buyers and I have data that you will lose market share to Compaq next quarter. Do you want to hear more?” To his credit, he immediately asked “When can you be here?”
At that time, I was publisher of Computerworld, a weekly trade newspaper for IT management. We had a buyers database that tracked current and future purchase intent for the major IT sites around the US.
I had many meetings with Michael over the years. Like anyone, he wanted to hear what his company was doing well, but he leaned in closer when I suggested how they could improve. He always wanted to understand why they were losing deals not just how great they were. I believe that this is one of the many reasons why he has been so successful. Dell Computer was already a big, public company. Lots of employees. Layers of management. But Michael wanted to personally understand what was going wrong with those corporate accounts and figure out what they could do about.
It is human nature to want to hear people say good things about us–both to our face and to others. That’s true both personally and professionally. This is certainly pleasing but is it productive? Not likely. It encourages you to do more of the same things. Offer the same products. Pitch the same customers. Price products the same way. I will leave the opportunities for personal growth aside and focus on the business opportunities lost by only hearing the good news about your business.
Rick Turoczy, longtime Portland startup mentor, catalyst and matchmaker, raised this prospect in a recent tweet. He advocated talking to clients that had fired you and customers who had stopped buying.
It immediately struck me that this should be part of every company’s–and particularly every startup’s– basic discipline. I would suggest a couple of “rules”. The word rule is in quotes because there is no governing body to enforce the rules. Maybe just strong suggestions.
First, it needs to be clear that this isn’t a sales call. It is a research call. The minute that the customer senses that this is a desperate last ditch effort to save the business, they will shut down.
Second, this should be done by management not a salesperson. The first reason is the one just mentioned–sales people can’t help themselves–they gotta sell. They are not always great at listening. Also, no one wants to rush into their boss’s office and highlight what they did wrong. Someone a step removed from the actual deal needs to be having the conversation.
Third, the objective is to really understand why you lost the business. Was it price? Was it product? Was it the sales person? Did the other company have a better relationship. This means that you need to get past all of the compliments up front and get to the real problems. Whenever they say “you were great, and we love you but…” I always believe that everything before the “but” is a lie.
Fourth, if the customer gives you ideas that make your business better, please acknowledge them. Say thanks but also tell them how you used their input to improve.
It’s not fun to hear what your company and your team has done wrong, but it’s one of the fastest ways to improve your business. Just ask Michael Dell.